Mass. tax package on fast track

House Democratic leaders have put their recently announced proposal for increases in gasoline, cigarette, computer design and utility taxes on a fast track for passage as soon as Monday.

Meanwhile, Gov. Deval L. Patrick, who had sought a much larger revenue increase, including a major income tax hike to fund expanded education and transportation programs, signaled Wednesday his fight for more revenue for transportation and education programs may not be over, suggesting the Legislature’s tax package is “too small.”

House and Senate Democratic leaders shot down the governor’s $1.9 billion tax hike plan in favor of the more modest $500 million tax package announced Tuesday, saying the governor’s proposals would put too much of a squeeze on the middle class and could hamper the state’s struggling economy.

That decision by House Speaker Robert A. DeLeo and Senate President Therese Murray, despite months of public campaigning by the governor and special interest groups for the larger revenue increase, was accompanied by another plan to boost state funding for local road maintenance from $200 million to $300 million next year.

Legislation for both the tax plan and the increase in Chapter 90 road funds for cities and towns were voted out of committee and given their first reading in the House Wednesday, clearing the way for floor debate and votes to pass the bills to the Senate Monday afternoon.

The governor, who offered restrained reactions to rejection of his tax bill so far, indicated Wednesday he will keep pushing for additional revenue and said he has been willing to negotiate with legislators over their differences. Mr. Patrick said he was still evaluating how to respond to the legislative package and would have more to say about it today.

“I have been clear publicly and with the legislative leadership that I am willing to compromise,” Mr. Patrick told reporters at the Statehouse after a meeting with a group of education advocates seeking more extended learning, early education and college aid funding from the governor’s tax proposal.

“I do think there is such a thing as too small. I think we have got to be serious about investing in ways that give us growth and investing in education and transportation do that,” the governor said. “This is a process and we will see where this process goes,” he said adding, “We are doing some analysis ourselves internally. I’m going to try to collect my thoughts and give you some comments tomorrow.”

But there was no white flag in the offing from the governor. “We are going to keep talking. It is too important to just stand back and wait for it to happen. If we want growth we have to go and get it and that is what my proposal was about,” Mr. Patrick said.

While the House and Senate leaders said their plan for a 3 cent per gallon gas tax increase, another $1 per pack on cigarettes and tax changes to boost income taxes on utilities and software design services would bring in about $500 million for transportation needs. Proponents said other funds in the budget that would be freed up by the dedication of new revenues to existing transportation costs, could be used to increase education funding next year.

But the governor said it would not be enough to address the chronic achievement gap between poor and minority students by providing more extended day and early education school programs or additional assistance to reduce college costs.

Without more funding this year for education, he said, many children across the state will miss out on lifetime opportunities and the state’s economy will be the worse for it.

“The consequences of that are that 30,000 3- and 4-year-olds get told by Beacon Hill we can’t do anything for you. We can’t do anything to make your future brighter to help you reach your potential,” Mr. Patrick said.

“We tell young people in middle schools that are underperforming that we cannot afford to do what is necessary to help prepare you for the work force. We tell the business community you are going to have to look elsewhere to meet your workforce needs. We tell middle class families that we can’t do anything and won’t do anything to help your kids pay for college,” Mr. Patrick said.

“I think we are better than that,” he said, adding that many legislators see the value of spending more to address educational shortcomings. “Always the hard part is asking people to sacrifice to make those aspects of our commonwealth better and stronger and that’s what I’m pushing,” the governor said.

While Republicans said the tax hikes are not needed, some business groups, including the Massachusetts Taxpayers Foundation, called the smaller legislative package a reasonable approach. But groups advocating for significant increases in education and transportation funding expressed frustration with the House-Senate leaders’ tax package.

Deborah Shah, executive director of the grass-roots organization Progressive Massachusetts, that has been working for the last year for more state revenue for transportation, education and social services, demanded lawmakers reject the leadership tax plan. She said the governor and many other lawmakers back the governor’s $1.9 billion tax hike plan because it showed “real vision and a commitment to supporting our communities.”

Kristina Egan, of Transportation for Massachusetts, a coalition of advocacy groups supporting the governor’s tax package, said the smaller tax package would mean fewer new jobs, the likelihood of higher mass transit fares and chronic under-funding for the state’s transportation system.

Speaking to educators and parents with the group Stand for Children, which for 10 years has been advocating for funds to overcome the achievement gap in lower income urban schools and lower college costs, the governor said they should continue talking to lawmakers about funding his proposals.

“It’s not like we have to persuade people about the worthiness of these investments. The question is are we, all of us, prepared to ask of each other a little more sacrifice to make life a lot better for ourselves and our children,” Mr. Patrick said.